Category :

Global Navigator: Risk off as interest rates keep rising

Global Navigator: Risk off as interest rates keep rising

Redemptions from EPFR-tracked Equity Funds hit an 11-week high in early September as investors surveyed a sea of troubles, ranging from the complete shut-down of the Nord Stream 1 natural gas pipeline connecting Russia with European markets to the US Federal Reserve’s plan to double the pace of its balance sheet reduction.

Global Navigator: Will the Fed light 75 more candles?

Global Navigator: Will the Fed light 75 more candles?

Hawkish remarks by US Federal Reserve policymakers going into the final week of August put the brakes on what investors are hoping is the next leg of a bull market. Worried that they may be walking into another 75 basis points hike in US interest rates next month, those investors call a halt to the rebuilding of positions exited during the second quarter.

Global Navigator: Investors keep their eye on bright future

Global Navigator: Investors keep their eye on bright future

The present, in mid-August, continued to offer little obvious comfort to investors. Russia’s invasion of Ukraine ground on towards the 200-day mark, drought weighed on transport, agriculture and energy in countries ranging from France to China, the seven-day average for global Covid-19 cases remained above 900,000 and inflation remains elevated in the US, Europe and many emerging markets.

Global Navigator: An invitation to take on more risk?

Global Navigator: An invitation to take on more risk?

As expected, the fourth week of July ended with the Federal Reserve hiking US interest rates by another 75 basis points. For a market that feared June’s inflation number – a 40-year high – might justify a 100 basis points hike, the smaller increase was greeted with relief and a modest jump in risk appetite.

Global Navigator: For Europe, the screws keep tightening

Global Navigator: For Europe, the screws keep tightening

The third week of July was a tense one for investors with a European focus, who waited for the answers to a number of thorny questions. Would Russian gas start flowing again through the Nord Stream 1 pipeline? Would Italian Prime Minister Mario Draghi retain the support of his coalition government? Would the European Central Bank act on previous guidance and raise interest rates for the first time in 11 years? When will one of the worst heatwaves ever experienced by Europe break?